'Streamlined' tax bill would pave way for taxing the internet - Businesses shake off apathy to put heat on legislators

TRACKSIDE © by John D’Aloia Jr.

July 1, 2003

We left off last week noting the woes facing one Kansas businessman created for him by the enactment of Kansas House Bill 2005, the "Streamlined" sales tax law, in the closing days of the 2003 session. It may be streamlined for those who spend sales tax money - it certainly is not for those who have been shanghaied to be tax collectors. It should be noted that the Clerks around the country have been working years on this project to establish the legal groundwork for taxing the Internet. The legislators who voted "aye" apparently care not about the negative economic impact placed upon businesses and local jurisdictions.

I believe it was President Reagan who opined that a guiding political principle in our legislatures was that if an endeavor was successful, it should be taxed. The Internet is becoming a means for marketing success and politicians cannot stand to see an endeavor proceed without getting their hands on a part of the profits, an action they can do using the coercive power of government without any productive effort on their part. The profits are there to be tapped for whatever wasteful spending, whatever favorite constituency the politicians wish to reward with a transfer of tax dollars, whether it is buying votes with more social spending, or buying campaign contributions with tax breaks for the Boeings of the world. It is such fun spending other people’s money - and so easy. They are no better than Willie Sutton who is quoted as answering the question "Why do you rob banks?" with "Because that is where the money is." or words to that effect.

Apparently, a wide spectrum of businessmen have been so incensed about what state government has done to them that they have shaken off any apathy they may have had and started to put the heat on elected officials. There has been a flurry of statements issued out of Topeka trying to calm the anger and provide cover for legislators who voted "aye." One such statement came out of the Senate President’s office in the form of talking points. He had nine. Space does not permit presenting and commenting on all, but here are four.

"Necessary if Kansas is to be a voting participant in the Streamlined Sales and Use Tax Agreement. Voting status enables Kansas to help shape national policy." Did you notice that this law also is an effort to crack down on the collection of use taxes? And give me a break about helping to shape national policy. Those who will be involved and voting will be in lock step - the agreement is a good deal, big government is great, and sales taxes should be squeezed out of as many sales transactions as possible. (Could a Value-Added-Tax be next?)

"Nationally, small businesses were the primary instigators of the Streamlined Sales Tax initiative." I will let Ken Daniel, the state chairman of the National Federation of Independent Businessmen answer this one. In an e-mail sent to several legislators, he said: "This is to inform you that "small businesses" were never the "primary instigators" of the SSTP. Furthermore, "retailers across Kansas" may have asked "them" to pass a bill, but I sure don't know who those retailers were unless they were big biz. Neither NFIB (state OR national) nor WIBA [Wichita] has EVER come out in favor of the SSTP. The Kansas Chamber has spoken in favor of the "fairness" part, but certainly not in favor of "destination sourcing". Let's get real. The SSTP has been a key objective of the National Governor's Conference for years and has never been a goal of small business, period. State and local government officials, both elected and bureaucrats, have been pushing and suing and trying to get this done for years--in fact, before the Internet was even around."

"KDOR does not expect "everyone" to be able to comply by July 1, 2003." and "KDOR stated that it will not begin enforcing the new sourcing rule right away." Why, Senator, did you allow a bill to go into law that no-one could comply with, both in government and in the private sector? When laws are enforced based on the whim of the enforcer, the rule of law is degraded and the environment is established for selective enforcement and harassment of political enemies and "trouble-makers."

What can be done? Keep the pressure on elected officials at all levels of government in the state. Start with the Guv - she called for this mess in her State of the State address. Letters-to-the-editor are very much in order, as are calls to talk shows such as Jim Cate’s Topeka morning show.

See you Trackside.


In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. [Ref. http://www.law.cornell.edu/uscode/17/107.shtml]

Back to Current Edition Citizen Review Archive LINKS Search This Site